California urged to assess energy reform

California officials need to add up the costs of all the state’s clean-energy policies before adopting any more, according to a report issued Monday by a government oversight agency.

The state has adopted a series of far-reaching energy reforms – boosting the use of renewable power and reining in greenhouse gases – without considering how each policy affects the others, the Little Hoover Commission argues in the report.

Even worse, state officials have no clear idea how much all of those reforms, taken together, will cost.

Californians could soon face a “rate impact bomb” of exploding electricity prices as a result, the report found. The governor and the Legislature should refrain from adopting any big new energy initiatives until those costs are better understood, according to the report.

“Blazing the trail on energy policies creates a significant burden to succeed,” the report reads. “Should energy costs unexpectedly escalate or energy becomes unreliable, California will jeopardize not only its own environmental stewardship goals, it will put the state’s economy at risk and jeopardize support for renewable energy in other states and other countries as well.”

The report also calls for consolidating all state energy policy in one department.

Currently a patchwork of agencies – primarily the California Energy Commission and the California Public Utilities Commission – splits oversight of energy issues. Such a “balkanized” approach makes it hard for the state to meet all of its energy goals, the report argues. The idea of consolidation has been floated before, with then-Gov. Arnold Schwarzenegger pushing it in 2005. But it has never gained traction.

More than any other state, California is trying to transform its system for generating and delivering energy. State law requires that utility companies derive 33 percent of their electricity from renewable sources by the end of 2020. Power plants on the coast are being forced to cut the amount of water they use for cooling. The state’s new cap-and-trade system will slowly lower the amount of greenhouse gases that power plants and industrial facilities can produce.

But the state has not adequately explored how these policies interact, according to the report. For example, the electricity output of wind farms and solar power plants varies hour-by-hour, requiring utilities to rely on fossil-fuel power plants for backup. Construction of more fossil fuel plants, triggered by the rising use of renewable power, could complicate the state’s efforts to curb greenhouse gases, the report says.

The report’s authors call on Gov. Jerry Brown to issue an executive order to the Energy Commission and the Public Utilities Commission, launching a study of the state’s energy policies and regulatory structure. In specific, the study should assess how the various policies will affect electricity rates for consumers.

A spokesman for the governor said Brown would review the Little Hoover Commission report but did not offer any comments on its contents. Created by the Legislature in 1962, the commission looks for ways to improve California’s government.

David R. Baker is a San Francisco Chronicle staff writer. E-mail: dbaker@sfchronicle.com